I had the pleasure of speaking on the new EU Foreign Subsidies Regulation (FSR) at the annual FAIB The legal year in review lunch debate hosted by Bird & Bird on 12 December 2023. Below I provide a summary of the key take-aways that companies must keep in mind regarding this regulation. 

The new Foreign Subsidies Regulation (14 December 2022) enables the European Commission to address distortions caused by foreign subsidies and allows the EU to ensure a level playing field for all companies operating in the Single Market, while remaining open to trade and investment. 

Concretely, the Regulation imposes:

• an obligation for undertakings to notify the receipt of foreign subsidies in case of concentrations and participation in public procurement procedures in the EU, and 
• an investigative power for the European Commission in all other cases.

If the Commission finds that a foreign subsidy exists and that it distorts the internal market, it will perform a balancing test. This is a tool to assess the balance between the positive and negative effects of a foreign subsidy. If the negative effects outweigh the positive effects, the Commission will be empowered to impose redressive measures or to accept commitments from the undertakings concerned that remedy the distortion.

If you would like more detailed information on the FSR, you will find it in this article. My team and I have also prepared a one-page flowchart which makes it easy for companies to understand if they have to notify their foreign subsidies under the new rules or not.